Post on 02-Nov-2014
description
© L2 2011 L2ThinkTank.com© L2 2011 L2ThinkTank.com
Specialty RetailSCOTT GALLOWAY
NYU Stern
AU G U S T 2 3 , 2 0 11A Think TAnk for DiGiTAL innOVATiOn
®
A Think TAnk for DiGiTAL innOVATiOn
2
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
Furthermore, Google reports that the average consumer is
discernibly influenced by 10.4 discrete pieces of information,
up from 5.3 sources just a year ago.2 The implications are
significant as retailers confront an increasingly crowded,
and dynamic consideration set.
Threat To date, the digital strategy for most retailers has been selec-
tion, convenience, and lower prices. This strategy favors scale,
and one firm, Amazon, is a giant whose expansion has starved
any retailer in its path. In the first quarter of 2011, Amazon grew
three times faster than other retail e-commerce sites and nearly
five times the rate of overall retail. Constituting one-third of the
U.S. e-commerce market, the digital native is a threat to retail-
ers ranging from Wal-Mart to Williams-Sonoma.3 Amazonian
infrastructure investments, made possible by an exceptionally
low cost of capital, bring new meaning to the term “disruptive.”
i n T R O D U C T i O n
influence Digital platforms continue to garner greater influence over commerce, on and offline. More than 97 percent of consumers report that social media affects at least some of their purchasing decisions.1
Seventy-nine percent of smartphone owners use their devices while shopping, and 70 percent of consumers look at
product reviews before making a purchase.
ChAnGe in 2010 & 2011 DiGiTAL iq vs .
ChAnGe in 2009 & 2010 FiSCAL ReVenUeS
(N=35)
2009
-201
0 R
even
ue G
row
th
Change in Digital IQ (Percentile Rank)
-40%
-20%
0%
20%
40%
20% 40%-40% -20%
1. “In Hot Pursuit: What makes people want to follow a brand?,” Andy Wibbels, Get Satisfaction, June 29, 2011.
2. “ZMOT: Winning the Zero Moment of Trust,,” Jim Lecinski, May 24, 2011.
3. “Amazon.com: The Hidden Empire,“ Stéphane Distinguin, faberNovel, May 2011.
Source: Corporate 10ks, Annual Reports.
3
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
2010
RO
IC (
%)
2011 Digital IQ
-80%
-60%
-40%
-20%
0%
20%
40%
80%
60%
60 100 120 16040 80 140
Source: Corporate 10ks, Annual Reports.
i n T R O D U C T i O n
SCOTT GALLOwAy
Founder, L2 | Clinical Professor of Marketing, NYU Stern
What to Do?Historically, specialty retailers have differentiated themselves from
low-cost peers by establishing an aspirational environment, edited
selection, and top-shelf service, all mixed with traditional media
spend. The offline strategy is still the right one, but the tactics and
weapons have changed. Brands that are thriving are engaging in
conversations directly with their customers on social media platforms,
creating new and interesting ways to purchase online, and building
innovative mobile apps to augment the shopping experience.
ChangeIn our second annual Digital IQ Index®: Specialty Retail, mobile and
social platforms took on a new level of importance. As a result, none
of the companies ranked Genius in 2010 maintained their status.
The dynamic nature of the medium rewards risk-takers and pun-
ishes complacency as evidenced by several brands ascending or
falling dramatically in this year’s study.
Digital iQ = Shareholder ValueOur thesis is that shareholder value is inextricably linked to digital
competence. In the 2010 Study we speculated that Digital IQ “may be
a forward-looking indicator of revenue growth.” Brands’ total reported
revenues in 2010 confirm our thesis. In addition, there is evidence of
a positive relationship between Digital IQ and return on invested capi-
tal (ROIC). We hope this study continues to help managers prioritize
efforts and allocate capital to generate the greatest return. Please
contact me at scott@stern.nyu.edu with questions or comments.
Regards,
ReLATiOnShip beTween 2011 DiGiTAL iq & ROiC
(N=29)
4
Want to know more about your brand’s ranking?COnTACT US
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
MeThODOLOGyA b O U T T h e R A n k i n G S
Site - 30%: Effectiveness of brand site.
FunCTiOnALiTY & COnTenT - 75%:• Technology
• navigation & product/Site Search
• Social Media integration
• Customer Service & Store Locator (when applicable)
• product page
• Checkout
• Account
BRAnD TRAnSLATiOn - 25%:• Aesthetics
• Messaging & Visuals
Digital Marketing - 30%: Marketing efforts, off-site brand presence, and visibility on search engines.
• Search: Traffic, SEM, SEO, Web Authority
• Advertising & innovation: Display, Retargeting, Recent Brand Initiatives, Presence on Tumblr
• blog & Other User-Generated Content: Mentions, Sentiment
• email: Frequency, Content, Social Media Integration, Promotion
Social Media - 20%: Brand presence, community size, content, and influence on major social media platforms.
• Facebook: Likes, Growth, Tabs & Applications, Responsiveness, Interaction Rate
• Twitter: Followers, Growth, Frequency, Online Voice
• youTube: Views, Number of Uploads, Subscriber Growth, Viral Videos
Mobile - 20%: Compatibility and marketing on smartphones and other mobile devices.
• Mobile Site: Compatibility, Functionality, Transaction Capability
• iOS Applications (both iphone & ipad): Availability, Popularity, Functionality, iPad Differentiation
• Other platforms (Andriod, blackberry): Availability, Popularity, Functionality
• innovation: SMS, Geolocal, Recent Brand Initiatives
CATeGORieS
140+ Genius Digital competence is a point of differen-tiation for these retailers. Site content is searchable, shareable, and mobile-opti-mized. Social media efforts complement wider digital strategy. Virtual storefront seamlessly extends to mobile.
110-139 GiftedBrands are experimenting and innovating across site, mobile, and social platforms. Digital presence is consistent with brand image and larger marketing efforts.
90-109 AverageDigital presence is functional yet predict-able. Efforts are often siloed across platforms.
70-89 Challenged Inconsistent adoption of mobile and social media platforms. Site lacks inspiration.
<70 Feeble Investment does not match opportunity.
5
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Flash SaleApparel HomeFurnishings
Beauty& Skincare
Watches& Jewelry
Accessories DepartmentStore
E-tailer
Want to know more about your brand’s ranking?COnTACT US
D i G i TA L i q R A n k i n G
Rank Retailer Category Digital iQ Class Description
1 MACY'S Department Store 150 GeniusStrong social media and the “Magic of Macy’s” mobile site crowns the venerable department store #1
2 ViCTORiA'S SeCReT Apparel 145 Genius A Facebook community 14 million strong and growing
3 nORDSTROM Department Store 143 GeniusUber responsive Twitter account and robust mobile site stand out; site redesign embraced risk—and it paid off
4 SePHORA Beauty & Skincare 136 Gifted Content-rich digital platform caters to beauty-loving customer base
4 uRBAn OuTFiTTeRS Apparel 136 Gifted A slick and dynamic digital platform bolsters efforts of this hip retailer
6 THReADLeSS.COM e-tailer 133 Gifted More than 1.6 million Twitter followers are base of new retail model
7 BLueFLY e-tailer 132 GiftedCloset Confession: Email-gated sales and responsive customer service feed our fashion obsession
8 BLOOMinGDALeS Department Store 131 Gifted Little (digital) brown bag delivers
8 GiLT GROuPe Flash Sale 131 Gifted Gold standard in flash sales
8 neT-A-PORTeR e-tailer 131 Gifted Interactive “live” map allows fashionistas to monitor peers’ shopping bags across the globe
8 POTTeRY BARn Home Furnishings 131 Gifted Video-rich site brings home décor to life
12 neiMAn MARCuS Department Store 130 Gifted Robust email marketing; fans rave over photo albums
13 SAKS FiFTH AVenue Department Store 124 Gifted Rich product pages coupled with a newly active Twitter feed bolster IQ
6
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Flash SaleApparel HomeFurnishings
Beauty& Skincare
Watches& Jewelry
Accessories DepartmentStore
E-tailer
Want to know more about your brand’s ranking?COnTACT US
D i G i TA L i q R A n k i n G
Rank Retailer Category Digital iQ Class Description
14 iKeA Home Furnishings 123 Gifted More than 500,000 unique visitors monthly
14 RALPH LAuRen Apparel 123 Gifted Digital legacy is bolstered by brand’s 3.5 million + Facebook fans
16 CRATe & BARReL Home Furnishings 121 GiftedStrong customer service and store locators, but a comprehensive video experience would bring it all home
17 BROOKS BROTHeRS Apparel 119 Gifted Rewards loyal followers with premium branded content
17 WiLLiAMS-SOnOMA Home Furnishings 119 Gifted Immersive site, growing mobile footprint, and active email marketing
19 AnTHROPOLOGie Apparel 118 Gifted Craftily curated content is indigenous to this brand’s beautiful site
19 TiFFAnY & CO. Watches & Jewelry 118 Gifted A jewel of a mobile app and smart digital cross promotion
21 Rue LA LA Flash Sale 117 Gifted Android app pays dividends
22 A|X ARMAni eXCHAnGe Apparel 116 Gifted Branded content seamlessly integrated into social media provides an everyday getaway
22 BeRGDORF GOODMAn Department Store 116 Gifted “Faces of 5F” was a hit, but needs to improve mobile
22 COACH Accessories 116 Gifted Meets standard on every platform, but needs to innovate to return to Genius class
25 BATH & BODY WORKS Beauty & Skincare 115 Gifted Two million Facebook fans, but dated site disappoints
25 DieSeL Apparel 115 Gifted Strong premium content, mobile site, and digital marketing
7
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Flash SaleApparel HomeFurnishings
Beauty& Skincare
Watches& Jewelry
Accessories DepartmentStore
E-tailer
Want to know more about your brand’s ranking?COnTACT US
D i G i TA L i q R A n k i n G
Rank Retailer Category Digital iQ Class Description
27 L'OCCiTAne Beauty & Skincare 112 Gifted Provençal charm should extend to mobile
28 BAnAnA RePuBLiC Apparel 108 Average Admirable foray into F-commerce
28 BARneYS neW YORK Department Store 108 Average The Window provides welcome glimpse into the world of Barneys
28 CHiCO'S Apparel 108 Average Solid effort, but still in search of a Twitter strategy
31 BeBe Apparel 106 Average VaVaVoom contest was sexy, confident, and cool
31 JuiCY COuTuRe Apparel 106 Average Static site brings the brand down
33 SHOPBOP e-tailer 104 Average We don’t <3 absence of a mobile experience
34 LuLuLeMOn ATHLeTiCA Apparel 103 Average Hyperlocal social media strategy works; needs to bring the experience to mobile
34 WeST eLM Home Furnishings 103 Average “Simple products for modern living” and an outdated digital footprint
36 HAuTeLOOK Flash Sale 102 Average Average
37 Ann TAYLOR Apparel 101 Average Three Tumblrs and photocentric Twitter handle create tailored social footprint
38 7 FOR ALL MAnKinD Apparel 98 Average Twitter followers grew 55 percent in June alone
38 BLue niLe e-tailer 98 Average Dated site for a child of the medium
8
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Flash SaleApparel HomeFurnishings
Beauty& Skincare
Watches& Jewelry
Accessories DepartmentStore
E-tailer
Want to know more about your brand’s ranking?COnTACT US
D i G i TA L i q R A n k i n G
Rank Retailer Category Digital iQ Class Description
38 J. CReW Apparel 98 Average A digital experience in need of a more colorful social media voice
41 ABeRCROMBie & FiTCH Apparel 97 Average Cannot rely on models alone; Twitter reactivation would be fitting
41 LORD & TAYLOR Department Store 97 Average F-commerce is a positive first step for the nation’s oldest department store
43 CARTieR Watches & Jewelry 96 Average Good-looking, but faulty site mechanics
44WHiTe HOuSe | BLACK MARKeT
Apparel 95 Average Uninspired
45 iDeeLi Flash Sale 94 Average Flash sale brand should have a mobile site
45 SWAROVSKi Watches & Jewelry 94 Average Social media properties shimmer, but site has lost its sparkle
47 LuSH Beauty & Skincare 92 Average Strong site, but limited mobile presence
47 SWATCH Watches & Jewelry 92 Average Multi-site e-commerce navigation lacks intuition
49 FRenCH COnneCTiOn Apparel 89 Challenged YouTube channel is trés formidable!
50 TALBOT'S Apparel 87 Challenged Infrequent tweeting weakens IQ
51 ReSTORATiOn HARDWARe Home Furnishings 85 ChallengedFacebook growth fueled by exclusive offers is a bright spot amid an otherwise unimpressive showing
52 ZALeS Watches & Jewelry 83 Challenged Enhancing mobile and YouTube offering would help
9
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Flash SaleApparel HomeFurnishings
Beauty& Skincare
Watches& Jewelry
Accessories DepartmentStore
E-tailer
Want to know more about your brand’s ranking?COnTACT US
D i G i TA L i q R A n k i n G
Rank Retailer Category Digital iQ Class Description
52 RuGBY Apparel 83 ChallengedThe Poets Club hit a mark, but not enough to compensate for an otherwise static digital experience
54 One KinGS LAne Flash Sale 82 Challenged Fixer-upper: Curated showcases could use more interactive material
55 THe BODY SHOP Beauty & Skincare 81 Challenged More vocal Twitter handle could provide a stronger voice for cause-marketing efforts
56 COLe HAAn Accessories 79 Challenged Sporadic tweeting and limited social sharing feel manufactured
56 GYMBORee Apparel 79 Challenged Digital marketing efforts are childlike
58 eTHAn ALLen Home Furnishings 76 Challenged Small but mighty Facebook page signals potential
58 TuMi Accessories 76 Challenged Mobile is a must-have
60 STuART WeiTZMAn Accessories 73 Challenged Product videos won’t stop well-heeled clientele from moving to competitors’ sites
61 inTeRMiX Department Store 72 Challenged Beyond Best Dressed…in the wrong direction
61 LuCKY BRAnD Apparel 72 Challenged An unfortunate digital presence
63 CLuB MOnACO Apparel 61 Feeble Still not e-commerce enabled
64 TOuRneAu Watches & Jewelry 43 Feeble Clock is ticking before getting completely left behind
10
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
DiGiTAL iQ
<70Club Monaco
Tourneau
AVeRAGe
CHALLenGeD
Banana Republic
Barneys New York
Chico’s
bebe
Juicy Couture
Shopbop
Lululemon Athletica
west elm
HauteLook
Ann Taylor
7 For All Mankind
Blue Nile
J. Crew
Abercrombie & Fitch
Lord & Taylor
Cartier
White House | Black Market
ideeli
Swarovski
LUSH
Swatch
DiGiTAL iQ
90-109
DiGiTAL iQ
>140
Macy’s
Victoria’s Secret
Nordstrom
DiGiTAL iQ
110-139
Sephora
Urban Outfitters
Threadless.com
Bluefly
Bloomingdales
Gilt Groupe
NET-A-PORTER
Pottery Barn
Neiman Marcus
Saks Fifth Avenue
IKEA
Ralph Lauren
Crate & Barrel
Brooks Brothers
Williams-Sonoma
Anthropologie
Tiffany & Co.
Rue La La
A|X Armani Exchange
Bergdorf Goodman
Coach
Bath & Body Works
Diesel
L’Occitane
GiFTeD
DiGiTAL iQ
70-89
French Connection
Talbot’s
Restoration Hardware
Zales
Rugby
One Kings Lane
The Body Shop
Cole Haan
Gymboree
Ethan Allen
Tumi
Stuart Weitzman
Intermix
Lucky Brand
FeeBLe
DiGiTAL iq DiSTRibUTiOn
% of brands per Digital iq Class
k e y F i n D i n G S
in the Company of GeniusOnly three brands, Macy’s, Victoria’s Secret, and Nordstrom,
achieved Genius status in this year’s Index. Genius brands bal-
ance digital investments across platforms including strong mo-
bile offerings, integrated social media, and robust e-commerce
marketing tactics. These investments pay dividends, as Genius
brands demonstrate greater average time on site by users and
increased repeat visitors.
In this year’s Index, 70 percent of retailers fell within the Gifted
or Average categories. In contrast, in the 2010 Index seven
brands notched Genius status, but less than half (49 percent)
were categorized as Gifted or Average. As this shift indicates,
sophisticated multi-platform presence has become more
commonplace, making it increasingly difficult for brands in the
Specialty Retail sector to utilize digital as a point of competitive
differentiation.
The only Feeble brands, Tourneau and Club Monaco, have yet
to embrace e-commerce.
GeniuS
37%
5%
33%
22%
3%
AVeRAGe TiMe On SiTe & SiTe ViSiTS peR USeR by DiGiTAL iq CLASS
(N=64)
Digital iQ ClassAvg. Time on Site
(minutes)Site Visits per user
(visits)
GeniuS 6:54 9.1
GiFTeD 4:48 6.9
AVeRAGe 4:36 6.5
CHALLenGeD 4.30 7.1
FeeBLe 2:30 3.5
Source: Alexa.
On average, users spend more time on, and visit more frequently, sites with higher Digital IQs
11
Want to know more about your brand’s ranking?COnTACT US
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Macy’s: Apps enable crossplatform m-commerce while retaining brand consistency
k e y F i n D i n G S
in the Company of Genius
Macy’s: Responsive Twitter handle balances premium content, customer service, and QR marketing to attract followers
Macy’s: Engaging and innovative Facebook tabs make the Macy’s page a social destination
12
Want to know more about your brand’s ranking?COnTACT US
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Victoria’s Secret: iPad app provides the mobile portal for dynamic branded content
k e y F i n D i n G S
in the Company of Genius
Victoria’s Secret: F-commerce opportunity creates a storefront visible to over 700 million Facebook
well-Managed Digital Footprint:Interactive style sheets with curated e-commerce, slick premium content, videos, and Facebook sharing
13
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
Feeb
leCh
alle
nged
Aver
age
Gift
edG
eniu
s
70
30
90
110
140
170
2011 AVG. IQ
86
2010 AVG. IQ
56
2011 AVG. IQ
119
2010 AVG. IQ
1052011 AVG. IQ
88
2010 AVG. IQ
69
2010 AVG. IQ
94
2011 AVG. IQ
1072011 AVG. IQ
105
2010 AVG. IQ
91
2010 AVG. IQ
112
2011 AVG. IQ
108
2011 AVG. IQ
103
2010 AVG. IQ
96
2011 AVG. IQ
120
2010 AVG. IQ
117
Flash Sale ApparelHomeFurnishings
Beauty& Skincare
Watches & Jewelry
AccessoriesDepartmentStore
E-tailer
k e y F i n D i n G S
The Department Store Strikes BackThe average Digital IQ of the Department Store category
jumped 14 points from 2010, closely trailing that of digitally
native E-tailers for the highest Digital IQ. Digital strides mirror
the revitalization in the category as, for the first time in more
than a decade, Department Stores grew retail market share.4
The Watches & Jewelry and Accessories categories continue
to be the worst performers, averaging Digital IQs of 88 and
86, respectively. However, both categories vastly improved as
brands began making investments in social media.
AVeRAGe DiGiTAL iq SCORe by CATeGORy
2010 vs. 2011
4. “Dowdy Department Stores Start Looking Cool Again,” Elizabeth Holmes and Ann Zimmerman, Wall Street Journal, August 4, 2011.
14
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
AVeRAGe AVeRAGe
ChALLenGeDGiFTeD
Still strong, but air is thin in Genius class. Maintaining pace means falling behind.
Coach
While still digitally-apt, returning to Genius will require a heightened focus on digital marketing efforts to
push innovation.
A|X Armani exchange
Brooks BrothersAVeRAGe GiFTeD
Fighting across multiple fronts. Launches of mobile site, app, YouTube channel, Twitter handle, and blog catapult brand from Average to Gifted.
Chico’sChALLenGeD AVeRAGe
Introduction of a mobile site and growth in Facebook community helped bring this retailer in line with its peers.
Bloomingdale’sAVeRAGe GiFTeD
Continued focus on delivering a unique mobile experience bolstered brand’s ranking.
GiFTeD
Gilt GroupeAVeRAGe
Consistent incremental investments in mobile (across devices and platforms) and social media growth help Flash Sale giant differentiate itself.
GiFTeD
L’OccitaneChALLenGeD
Concentrated investment in engaging social media programs and premium branded content push this brand to Gifted.
Strong e-commerce retailer needs greater cross-channel innovation to return to Gifted.
J.CrewAVeRAGeGiFTeD
The Body Shop
One of 2010’s social media leaders now posts average scores across platforms. Has yet to invest in mobile.
GeniUS GiFTeD
Still-genius e-commerce site isn’t enough to help brand retain rank on a balanced digital scorecard.
LuSH
GeniUS GiFTeD
k e y F i n D i n G S
TOp FiVe: GReATeST yeAR-OVeR-yeAR GAin OR LOSS
2010 vs. 2011 Digital iq percentile Rank
+28%-32%
+24%-33%
+22%-38%
+19%-40%
+19%-55%
15
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
k e y F i n D i n G S
Social SitesAdoption of social features such as product sharing, user
reviews, and live chat functionality has increased significantly
since 2010. Although most specialty retailers continue to evolve
their site experience, there is still a clear disparity between the
sites of brands classified as Genius and Gifted and those of
lower IQ classes. Specifically, product videos, video shareability,
and Facebook Connect offer opportunities for differentiation.
Sites that featured social sharing for products experienced 3.6
percent growth in site traffic, versus 0.3 percent for those that
have yet to adopt this feature.
SiTe FeATURe ADOpTiOn
% of Sites with the Following Tools 2010 vs. 2011
(June 2011)
iMpACT OF SiTe FeATURe ADOpTiOn
Three-Month Growth for Sites with & without the Following Features:
(July 2011)
0%
Feat
ure
Adop
tion
(%)
Live ChatProduct Like User ReviewsProduct Tweet
32%
44%
23%
31%
37%
48%
28%
52%
= 2011
= 2010
= SITES WITH
= SITES WITHOUT
Source: Alexa.
0%
Site
Tra
ffic
Gro
wth
(%)
User ReviewsSocial Sharing
3.8%
1.1%
3.6%
0.3%
Smart brands should be conducting research as to
who are their most profitable customers. Hint: They’re
not always the ones with the most Facebook friends
or Twitter followers. Take a look at how social sharing is driving
commerce. Almost all brands have social sharing on their websites
to drive traffic and commerce, but very few, if any, know exactly how
social sharing is leading to these conversions—and which customers
or visitors are driving the most conversion.
—Michael Lazerow | CEO, Buddy Media
“
”
16
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
k e y F i n D i n G S
email: Alive & KickingAlthough the time consumers spent on email in general
declined nine percent year-over-year,5 every category with the
exceptions of Watches & Jewelry and Apparel increased its
frequency of weekly emails, suggesting that the medium is still
one of the strongest call-to-action marketing tactics. As was the
case last year, Flash Sales, Department Stores, and E-tailers
register the highest email frequency, respectively, possibly as a
result of their high inventory turnover rates.
20 4 6 87
Flash Sale
Department Store
E-tailer
Home Furnishings
Apparel
Beauty &Skincare
Accessories
Watches &Jewelry
1 3 5
8.0
0.7
7.6
1.0
5.3
4.5
4.8
3.1
3.1
2.1
2.2
2.7
2.1
1.7
0.90.7
weekLy eMAiL FReqUenCy by CATeGORy
2010 vs. 2011
= 2011
= 2010
5. “Email Evolution: Web-based Email Shows Signs of Decline While Mobile Email Usage on the Rise,” comScore, January 20, 2011.
17
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
Here Comes everyoneApart from search engines, Facebook is the leading source of both upstream and downstream traffic to and from nearly every retailer’s site.6 In our study, Facebook accounted for a whop-ping 41 percent of upstream traffic to Threadless.com.
Competitor and sister sites had a nearly identical share of upstream and downstream traffic. Third-party e-commerce sites accounted for a larger percentage of downstream traffic than upstream, suggesting that shoppers often find products on brand sites and go elsewhere to compare prices.
k e y F i n D i n G S
7. “ShareThis Study: Facebook Accounts for 38 Percent of Sharing Traffic on the Web,” Erick Schonfeld, TechCrunch, June 6, 2011.
8. Association of Magazine Media (MPA), Internet Subscription Survey, 2010.
40%
20%
80%
60%
100%
% of Brandsfor whom the followingare a top eight source
of upstream traffic
% of Upstream Trafficto brand sites
originating from thefollowing sources
% of Brandsfor whom the followingare a top eight source of downstream traffic
% of Downstream Trafficfrom brand sitesto the following
destinations
To Brand SiteUpstream Traffic Downstream Traffic
95%
59%
50%
23%
98%
58% 59%
23%
11%
6%3% 2%
14%
7%4% 3%
From Brand Site
0%
= COMPETITOR SITE
= THIRD-PARTY E-COMMERCE SITE
= SISTER SITE
ReFeRRAL & DeSTinATiOn SiTeS FOR SpeCiALTy ReTAiL SiTeS
Upstream and Downstream Traffic to and from Facebook, Competitor, e-Commerce, & Sister Sites
(June 2011)
We are in the midst of a massive shift online from a
search and intent-based world to a social, people-
based world. The last three years were about the
consumer side of social platforms, as we watched Facebook, Zynga
and Twitter grow exponentially. The next three years will be about the
enterprise side of social, and how companies engage and grow their
businesses by tapping into these massive platforms.
—Michael Lazerow | CEO, Buddy Media
“
”
18
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
Size vs. engagementOur data indicates that Facebook interaction rates were nega-
tively correlated with the size of a brand’s Facebook page,
suggesting that retailers have yet to identify how to maintain an
engaged—and growing—Facebook community.
Smaller pages typically attain higher interaction rates, but only
to a point. Among the 64 brands in this study, engagement
declined sharply for those above a threshold of 50,000 fans.
However, there appears to be an emerging benchmark among
mature Facebook pages, as on average 0.07 percent of the
community responded to brand posts (by “liking”). No brand
with more than 400,000 likes was able to maintain an interac-
tion rate above 0.16 percent.
A|X Armani Exchange and Tiffany & Co. are best positioned to
reach the sweet-spot between scale and interaction.
COHORTS CROWDS
FAMILIES TRIBES
A|X Armani Exchange
Tiffany & Co.
k e y F i n D i n G S
SiZe OF COMMUniTy
note: Horizontal axis (Size of Community) is graphed on a logarithmic scale.
Le
Ve
L O
F e
nG
AG
eM
en
T
FACebOOk COMMUniTy SiZe vs . enGAGeMenT RATeS
Facebook ‘Likes,’ excluding brands with < 2000 Fans
(N=63; July 2011)
AVeRAGe ‘L ike’ inTeRACTiOn RATe
by Fan page Size
(June-July 2011)
Fan Page Size: <20k0.32%
Fan Page Size: 20k–50k
0.26%
Fan Page Size: 50k–100k0.07%
Fan Page Size: 100k–500k
0.08%
Fan Page Size: 500k–1MM
0.07%
Fan Page Size: 1MM+0.07%
= BRANDS WITH THE BEST CHANCE OF BUILDING “TRIBES” ON FACEBOOK
by Increasing Fan Base, Engagement, or Both
KeY:
19
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
AVeRAGe ‘L ikeS’ : inTeRACTiOn RATe by pOST Type
(July 2011)
k e y F i n D i n G S
Facebook: Product-CentricExamination of retailers’ Facebook walls reveals that fans are
most receptive to product-related messaging. Brands’ Face-
book posts that highlight and/or promote products garnered
the highest interaction rate among fans at 0.14 percent, com-
pared to 0.09 percent for contests, 0.08 percent for sales, or
0.06 percent for style commentary and advice.
While contests, giveaways and promotions are good tactics to
acquire fans, they don’t appear to generate consistent engage-
ment or stickiness on Facebook walls.
STyLe TipS & ADViCe
0.06%
COnTeST nOTiFiCATiOn
0.09%
GeneRAL COMMenT
0.13%eVenT
0.13%
pRODUCT hiGhLiGhTS
0.14%
SALe OR pROMOTiOn
0.08%
pR & bRAnD inFO
0.08%
20
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
0 20% 40% 60% 80%
83%Ethan Allen
41%Zales
38%Cole Haan
28%7 For All Mankind
22%Rue La La
21%One Kings
Lane
21%L’Occitane
18%Ann Taylor
16%Bergdorf
Goodman
16%Williams-Sonoma
Victoria’s Secret
Abercrombie & Fitch
Ralph Lauren
Coach
Bath & Body Works
Macy’s
Sephora
bebe
Swarovski
Juicy Couture
0
2 millio
n
3 millio
n
4 millio
n
1 millio
n
5 millio
n
5,069,672
3,444,327
2,129,084
2,056,996
1,956,104
1,576,609
1,430,262
1,296,675
1,142,014
14,456,049
k e y F i n D i n G S
TOp 10 bRAnDS: FACebOOk LikeS
(July 2011)
TOp 10 FASTeST-GROwinG FACebOOk pAGeS
(June-July 2011)
21
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F-COMMeRCe SOphiSTiCATiOn
% of brands employing the Following Tools on Facebook:
(July 2011)
k e y F i n D i n G S
F-Commerce: The next, next ThingIn the 2010 Index we reported that Brooks Brothers, Victoria’s
Secret, and Coach were experimenting with selling merchandise
directly off their Facebook walls. The path to innovation is not
always linear: Brooks Brothers and Coach have since pulled
their F-commerce platforms, while Victoria’s Secret has limited
Facebook checkout to gift cards only.
At the time of data collection, with the exception of Sephora
(which allows checkout on Facebook for both gift cards and
selected gift products) all other F-commerce offerings were
limited to gift cards. Bath & Body Works, Lord & Taylor, and
The Body Shop all boast gift card apps similar to that of Victo-
ria’s Secret. Banana Republic, Barneys, Bluefly, and Thread-
less provide an F-commerce experience that offers everything
but checkout through the Facebook page. After data collec-
tion ended, Gilt Groupe and 7 For All Mankind developed full
F-commerce storefronts, further demonstrating the dynamism
within this space.
Thirteen percent of brands are on the cusp of breaking into
F-commerce, offering heavily curated product catalogs with
live links to product pages on their e-commerce site. Fifty-nine
percent of brands have links to their e-commerce sites on their
walls, photos, or tabs. Surprisingly, 14 percent of brands still lack
an e-commerce redirect from their Facebook pages.
Additionally, we found a relationship between a brand’s up-
stream traffic from Facebook and the sophistication of its
F-commerce offering.no Product Links
Product Links
F-Commerce, no Checkout
Full F-Commerce (Primarily Gift Cards)
Facebook Page As interactive Product Catalog
14%
13%
6%
8%
59%
FA
Ce
bO
Ok
CO
MM
eR
Ce
SO
ph
iST
iCA
TiO
n
22
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
Upstream to brand Site
k e y F i n D i n G S
14% Full F-Commerce
(Primarily Gift Cards)
16% F-Commerce, no Checkout
15% Facebook page As
interactive product Catalogue
13% product Links
9% no product Links
innOVATiVe bRAnDS ARe exTenDinG TheiR STOReFROnTS TO FACebOOk:
product Links
F-Commerce
Facebook As interactive product Catalog
F-Commerce, no Checkout
F-C
OM
Me
RC
e S
Op
hiS
TiC
AT
iOn
Industry research shows that a majority of consumers
today are not on Facebook to shop. It’s important for
brands to think about bringing social to their online
store (where 100% people are going to shop) in addition to bringing
their online store to social (where only a small percentage are going
implicitly to shop).
—Michael Lazerow | CEO, Buddy Media
“
”
AVG.% OF UpSTReAM SiTe TRAFFiC FROM FACebOOk
% of Traf f ic to brand Si tes v ia F-Commerce
(July 2011)
23
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
Victor
ia’s
Secret
Abercr
ombie
&
Fitch
Ralph L
auren
Coach
Bath &
Body W
orks
bebe
Sepho
ra
Tiffan
y & Co.
Diesel
Juicy
Coutur
e
Overachievers:
Underachievers:
900%
386%
261%
234%
204%
152%
91%
73%58% 55%
Brooks
Brothe
rs
-94%
west e
lm
-94%
Interm
ix
-95%
Restor
ation
Hardware
-96%
Stuart
Weitzm
an
-97%
One King
s Lan
e
-97%
Club M
onac
o
-98%
Tumi
-99%
Torne
au
-100%
Ethan
Allen
-100%
OVeRAChieVeRS & UnDeRAChieVeRS
Actual Facebook Fans vs. predicted Facebook Fans Based on Google Monthly Global Search Volume (Linear Regression)
(July 2011)
Facebook: Overachievers & underachieversComparing a brand’s number of Facebook “likes” to the
number of global monthly organic searches for its brand name
on Google (a proxy for brand equity online) provides a
measure to identify brands that are Facebook overachievers
and underachievers.
With more than 14 million “likes,” it is no surprise that Victo-
ria’s Secret is the top overachiever within Facebook. Further
evidence that “sex sells,” Abercrombie & Fitch is second.
k e y F i n D i n G S
24
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
0 20% 40% 60% 80% 100%
105%SaksFifth
Avenue
84%HauteLook
67%Restoration Hardware
58%L’Occitane
55%7 For All
Mankind
46%Gilt Groupe
32%Bath & Body
Works
Cartier 25%
25%Shopbop
23%Brooks Brothers
Threadless
UrbanOutfitters
Coach
Sephora
NET-A-PORTER
Victoria’s Secret
Nordstrom
LululemonAthletica
Gilt Groupe
Anthropologie
0
100,0
00
200,0
00
300,0
00
400,0
00
500,0
00
433,369
82,014
88,235
88,689
129,371
139,950
149,396
170,281
276,671
1,631,953
k e y F i n D i n G S
beST in TweeT: TOp 10 FOLLOweRS
(July 2011)TOp 10 FASTeST-GROwinG TwiT TeR ACCOUnTS
(June–July 2011)
25
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
Victoria’s Secret
Diesel
Cartier
Sephora
Tiffany & Co.
Bluefly
Nordstrom
Pottery Barn
Ralph Lauren
Macy’s
0
1 millio
n
2 millio
n
3 millio
n
4 millio
n
5 millio
n
6 millio
n
7 millio
n
8 millio
n
25,087,447
7,322,877
3,546,001
3,131,164
2,955,896
1,770,814
1,467,467
1,360,584
1,165,055
1,139,322
TOp 10 bRAnDS: yOUTUbe
brand Channels with the Most Upload Views
(July 6, 2011)
k e y F i n D i n G S
YouTubeBrands’ YouTube videos generally received more views on
user channels than on their official channels. For instance, the
most-viewed Victoria’s Secret video has more than four mil-
lion views on user-generated channels, versus just 1.2 million
on the brand’s channel. Similarly, videos posted by users on
Abercrombie & Fitch, IKEA, HauteLook, 7 For All Mankind and
Macy’s received more views on third-party channels.
Michelle Phan, a prominent fashion and beauty vlogger on
YouTube, produces product-centric videos that typically attract
upwards of one million views, with her most-viewed video
garnering over 29 million views. The “How I Wear My Jeans!”
video, which was posted on Phan’s YouTube channel promot-
ing 7 For All Mankind jeans and HauteLook.com, registered
more than 1.5 million views. By contrast, the most-watched
video on 7’s YouTube channel attracted a mere 2,545 views.
The command and control culture of Specialty Retail has inhib-
ited the sector’s ability to better leverage bloggers and celebrity
vloggers. Embracing the fourth estate can drive more traffic to
YouTube pages and scale content distribution.
26
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
TOp 10 yOUTUbe ViDeOS ACROSS bRAnDeD & nOn-bRAnDeD ChAnneLS
brand vs. non-brand Videos
(July 2011)
0
1 millio
n
2 millio
n
3 millio
n
4 millio
n
5 millio
n
4,219,933
2,319,617
2,055,148
1,592,475
1,592,475
1,495,973
1,358,512
1,316,654
1,235,202
Victoria’s SecretFashion Show 2008 Part 1:
Glamour Goddess
No Shirts (111 Shirtless Men in Abercrombie & Fitch)
IKEA ad:Tidy up for your girlfriend
7 For All Mankind:How I Wear My Jeans!
with Michelle Phan
HauteLook:How I Wear My Jeans!
with Michelle Phan
Macy's Thanksgivingparade RickRoll
Calibre de Cartier, Mechanics of passion
(short version)
Paul sings Caruso atBloomingdale’s,
19th Nov., 07
Victoria’s Secret AngelsLip Sync Firework by
Katy Perry
Diesel Spring Summer2010 Catalogue to the tune
of a hundred lovers1,127,739
Click to view videos:
= BRAND CHANNEL
VIDEO ON:
= NON-BRAND CHANNEL
k e y F i n D i n G S
27
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
2011:
2010:
k e y F i n D i n G S
Going MobileThe most profound shift from the 2010 Index was the pace of
mobile adoption across platforms.
In last year’s study, less than 30 percent of brands were
optimized for a mobile platform. This year 67 percent of brands
support a mobile site, and nearly 45 percent have an iPhone
app. Adoption of the iPad is nascent, but rapidly gaining
momentum, growing six-fold since 2010.
In June, Forrester Research projected mobile commerce sales
will double in 2011 to $6 billion and, with a compounded annual
growth rate of 39 percent, will reach $31 billion by 2016.6
Although 56 percent of retailers offer an m-commerce enabled
mobile site, many have significant low-hanging fruit. Of those
with moble sites, more than one-quarter do not offer social shar-
ing, 56 percent do not provide customer service, and 63 percent
do not provide site search.
A missed opportunity for retailers in mobile is Android adop-
tion. Android users’ ad impression share surpassed that of
iOS mobile users in December 2010.7 In April, Nielsen report-
ed that more consumers plan to buy a smartphone powered
by Android than any other OS.8 Gilt Groupe, Rue La La, and
Macy’s were the only brands in the study to offer any type of
Android app.
M-Commerce Enabled
Social Sharing
Customer Service
Mobile Site Search
88%12%
74%26%
44%56%
37%63%
MObiLe SiTe FUnCTiOnALiTy
% of brands with and without the Following Features:
(June-July 2011)
MObiLe ADOpTiOn RATeS ACROSS pLATFORMS
% of brands on the Following Mobile platforms
(June-July 2011)
MOBiLe SiTe iPHOne iPAD
= WITH
= WITHOUT
= 2011
= 2010
ADOPTION IN:
39%45%
28%
6%
67%
25%
6. “Forrester Research Mobile Commerce Forecast: 2011 to 2016,” Sucharita Mulpura et al, June 17, 2011.
7. “For the First Time, Android Surpasses iOS Mobile Ad Impression Share,” Leena Rao, Seeking Alpha, January 13, 2011.
8. “Nielsen: Consumer Desire For Android Grows, Unlike iOS And Blackberry,” Robin Wauters, Tech Crunch, April 26, 2011.
28
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
k e y F i n D i n G SRue La La is one of only three brands in the index with an Android app
neiman Marcus offers on of the most comprehensive mobile sites
of any brand in the index
bluefly for ipad features the retailer’s aspirational
content
Victoria’s Secret extends its site’s rich content to a
shareable mobile platform
29
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
D i G i TA L p R O J e C T i O n S
L2’s road map for navigating the past, present, and future
of specialty retail online
Channel Strategy
Premium Content
Payment
Sales Partnerships
Customer Service
Mobile Presence
Social Media Strategy
Product Presentation
Today Tomorrow
Store + Site
Site
Credit Card
Department Stores
phone & email
SMS Marketing
build page & Fans will Come
Text & Static photos
Store + Site + Social Media
blogs
paypal, buyLater
Large Third-party e-Commerce platforms
(e.g., Amazon)
Twitter & Live Chat
iOS Apps + Mobile Sites
Fan/Follower Acquisition
interactive Zoom, Angled product Views
Store + Site + Social Media + Mobile
Tumblr & Geolocal
Mobile wallet
Flash Sale Retailers
Video Chat / Crowdsourced Customer Service
branded & Third-party Cross-platform presence
Fan/Follower Monetization (F-Commerce)
Shoppable product Videos (V-Commerce)
Yesterday
30
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
MObiLe eLeVATeS GiLT
Gilt Groupe emerges as the clear mobile winner not only within the
increasingly crowded Flash Sale category, but across the entire
Specialty Retail Index. Ideeli and One Kings Lane do not have
mobile-optimized sites. HauteLook has an iPhone app but no
iPad app. Along with competitor Rue La La, Gilt is one of only
three brands to offer an Android app (the third is Macy’s).
A Gilt strength: Availability across mobile operating systems, including blackberry
31
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
GeOLOCO
Although Foursquare launched more than two years ago,
specialty retail brands have been relatively slow to embrace the
platform. Only 15 of the 64 brands in the study have an official,
branded Foursquare account, few of which are active. Two
brands, Shopbop and Threadless, do not have brick-and-mortar
locations, yet still manage to create a geolocal experience.
Tiffany & Co. and Victoria’s Secret use their accounts to promote
tips and hotspots, with the former utilizing Foursquare as part of
its extensive, cross-platform “What Makes Love True?” campaign.
Macy’s has used Foursquare in conjunction with other social
media to augment several of its recent campaigns. In May, the
department store launched takeover ads publicizing its multi-
city “Towers of Flowers” tours.9 When users “checked in” on
Foursquare they received tips encouraging them to take pictures
of their local events and share them on Twitter via city-specific
hash tags (e.g., #MacysFlowerNYC and #MacysFlowerMIN).
At the end of the event, Macy’s gave out gift cards to a select
number of hashtag users.
Some efforts still generate lackluster results. As part of its
ongoing “Faces of Stupid” campaign, Diesel held a one-day
event in April during which participants were given a free T-shirt
for checking into the brand’s flagship location in Manhattan.
A mere 44 people checked in, leading many to conclude that
brands could struggle with such one-off campaigns without more
aggressive pre-promotion.10
9. “Macy’s ‘Flower Show’ Blossoms on HopStop, Foursquare,” Christopher Heine, ClixkZ, March 30, 2011.
10. “Why the Fashion Industry Loves Foursquare,” Macala Wright Lee, Mashable, May 11, 2010.
Victoria’s Secret promotes hotspots
using Foursquare
Tiffany & Co.’s cross-platform “what Makes Love True?” campaign
32
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
LUSh, VeRDAnT e-COMMeRCe
E-commerce can certainly be seamless, but seldom does it offer
as comprehensive an experience as in-store shopping. Of all the
brands featured in this study, LUSH offered the most comprehen-
sive online shopping experience. Each product page includes
two aspirational product descriptions (i.e., “Your swan song
before bed”), a slide show of comparable products, “How to use”
videos and instructions, in-depth ingredient analyses, shipping
options, and one-click checkout. LUSH also provides two sets of
reviews: A featured (typically glowing) review and a more com-
prehensive set of customer reviews with ratings.
in-depth ingredient analysis
LUSh offers handy “how To
Use” instructions to assist users
even after purchase
33
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
A pURChASe in eVeRy pORT
NET-A-PORTER has taken location-based social offerings to the
next level: “NET-A-PORTER Live” is an interactive shopping map
that reveals each purchase the E-tailer receives worldwide in
real time by placing a branded shopping bag and image (with a
live link) of the merchandise over the purchaser’s location. The
inspiration for this feature, including its “Users Online” traffic
meter, came from the company’s London headquarters, which
has been broadcasting real-time sales on oversized world-map
plasma screens for the past two years.11
neT-A-pORTeR’s location-based interactive
shopping map
11. “With Net-a-Porter Live, know what’s hot, or not,” James Covert, New York Post, June 15, 2011.
34
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
LULULOCAL
Several brands are endowing their individual retail locations
with grassroots influence by arming them with their own social
media accounts. One of the best, Lululemon blends consistent
messaging and brand with local relevance. The main Facebook
account—which “likes” its individual store accounts—focuses
on product-centric content, interspersed with general yoga and
fitness advice. Each store’s Facebook page complements, rather
than distracts from, the main account with posts centered on
local events, classes, job listings and customer service.
Location-specific Twitter handle and brand’s Facebook
page each serve a unique, complementary function
35
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
COnTeSTinG The wATeRS
In an attempt to rise above the Facebook contest noise,
bebe partnered with InStyle magazine in May to host
the “VaVaVoom” photo contest. Hoping to with their own
scooters, entrants submitted pictures of themselves in
bebe apparel posing alongside a prop Vespa at brick-
and-mortar retail locations.12
In June, Bergdorf’s partnered with Lucky Magazine
to crowd-source the brand’s Faces of 5F (i.e., the
6/8 6/18
6/16
6/26
6/296/9 6/1
96/1
76/2
76/3
06/7 6/15
6/25
6/286/6 6/1
46/2
46/5 6/13
6/236/4 6/1
26/2
26/3 6/11
6/216/2 6/1
06/2
0
500
1,000
1,500
2,000
+
iconic upscale department store’s younger, more
contemporary fifth-floor) campaign.13 Rather than
passively accepting entrants, the brand constructed a
gated Facebook tab in which fans submitted photos,
answered survey questions, and created a personal
profile. Bergdorf’s registered double the average
“like” interaction rate (0.12 percent vs. 0.06 percent)
with the announcement of the contest, and “like”
growth spiked considerably when the contest began
beRGDORF GOODMAn: Faces of 5F(Facebook ‘Likes’ per Day, June 2011)
bebe’s “VaVaVoom” photo contest drives consumers to brick-
and-mortar locations
(6/7/2011) and when it ended (6/24/2011). The latest
entries were featured on a live feed at the bottom of
the page, which transitioned to a spread introducing
the new faces of 5F after the contest’s conclusion.
JUne 6
Bergdorf announces
contestJUne 2
Total “Likes”: 102,056
JUne 21
Brand reminds fans of deadline
JUne 24
June submission period ends
JUne 7
Contest begins Bergdorf posts Lucky magazine
JUne 14
Co-branded messaging
on wall
12. “Contest Time: Make Us Say VaVaVoom & You Could Win a Vespa!,” Stylelust, May 11, 2011.
13. “Bergdorf Goodman and Lucky Introduce Faces of 5F,” PRWeb, June 9, 2011.
JUne 30
Total “Likes”: 116,272
36
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
FAnS wiTh beneFiTS
Plenty of brands offer incentives for Facebook “likes.” Cartier
allows fans to view exclusive videos. Ann Taylor and Zales
provide e-commerce discounts. Bloomingdale’s tempts fans with
a $2,000 shopping spree. A|X Armani Exchange, HauteLook,
Ideeli, L’Occitane and Victoria’s Secret lure fans with exotic
vacation giveaways.
Few, however, are as enticing as Rue La La’s “Vote For Style”
tab, which empowered fans to crowdsource one of the brand’s
boutiques in May. True to the nature of flash sales, the voting
lasted only 48 hours, during which the brand encouraged its
members to vote through email newsletters, on Twitter, and by
changing its Facebook landing tab to the “Vote For Style” app.14
The user-generated event was so popular that Rue La La offered
a “Just For Facebook Fans” sale in June and repeated “Vote For
Style” in July.
Rue La La’s “Vote for Style” campaign
14. “Rue La La Crowdsources Flash Sale from Facebook Fan Favorites,” Crosby, PR Couture, May 13, 2011.
37
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
OF bLOGS & GenTLeMen
Brooks Brothers’ blog, “Of Rogues & Gentlemen,” has
had as many as 1.5 million visitors in a single day.15 “Style
Commandments” include demonstrating appropriate sleeve
length, and the “Ask Brooks” section answers questions like
“What are the pieces of jewelry a man should never wear?”
The brand’s Twitter account, which launched in December,
is similarly playful. Posts are in the brand’s voice: Formal
yet approachable, exceedingly polite, and service-oriented.
Common tweets include “Thanks for stopping by,” and “Our
pleasure, sir,” and address specific followers by name, as if
they are visiting a brick-and-mortar location. Posts tend toward
a combination of style suggestions, garment care tips, and
one-on-one customer service.
15. “Social Media Case Study | Brooks Brothers | HZDG,” HZDG, n.d. Web, August 9, 2011. <http://www.hzdg.com/case-studies/brooks-brothers/>.
A page from the brand’s 1898 catalog demonstrates similar
voice to that of brooks brothers’ Twitter handle
#bowTieFriday is a regular tag in the brand’s Twitter feed, celebrating its classic style
38
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
eMbRACinG ChAnGe
IKEA has used YouTube to create focused marketing cam-
paigns with an abundance of rich premium content. In 2010,
the brand released 365 distinct video advertisements—one for
each day of the year—highlighting the store’s extensive prod-
uct selection. IKEA’s most viewed YouTube videos are typically
more entertaining than they are product-focused, most notably
its popular “IKEA Cats” and “Paul the Chair” videos.
In addition to its video offerings, IKEA has created unique mobile
and banner ads to demonstrate the breadth of its easy-to-as-
semble product lines. The “Banner Yourself” display encourages
web users to uncrate and self-assemble a banner advertisement,
mimicking the assembly process for an IKEA product.
After data collection, IKEA continued to innovate. In August,
the brand released its 2012 iPhone catalogue app, which was
promoted via Apple’s iAds.
F L A S h O F G e n i U S
ikeA released 100 house cats into one of the brand’s retail locations. The video has had over 1.5 million views on youTube and has its own Facebook page, ikeA Cats.
ikeA’s “banner yourself” campaign allows users to assemble their own banner right out of the virtual box
39
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
iF yOU ‘Like’ iT, SCAn iT!
With nearly one million Facebook “likes,” Diesel continues to
grow and engage its fan base. The brand recently launched a QR
code campaign in Madrid, integrating social media at point-of-
sale. Diesel shoppers use their mobile phones to scan product
QR codes, whereupon they are redirected to a mobile-optimized
Diesel product pages allowing them to “like” individual products
on Facebook.
Diesel launches its qR campaign in Madrid stores
40
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
F L A S h O F G e n i U S
SephORA’S eVeRywheRe
Sephora’s commitment to innovation in mobile sets it apart in
the Beauty category. Sephora’s apps integrate the brand’s many
media streams, including a Twitter feed, Facebook updates, two
blogs, and a YouTube channel.
The apps feature continuously updated beauty news, advice, and
product and trend information, as well as an interactive product
catalog and reviews. In addition, the brand’s new iPad app has an
innovative feature that transforms the device into a side-by-side
mirror and video player. The front-facing camera enables users to
see their own faces within the app while watching how-to videos
for applying makeup.
Sephora’s ipad app includes a multimedia
catalog and virtual mirror, among many other
features
41
DiGiTAL iQ Index®:
Specialty Retail
© L2 2011 L2ThinkTank.com
Want to know more about your brand’s ranking?COnTACT US
SCOTT GALLOwAyClinical Professor of Marketing, NYU SternFounder, L2
Scott is the founder of L2, a think tank for digital innovation, and Clinical Professor of Marketing at the NYU Stern School of Business where he teaches brand strategy and digital marketing. Scott is also the founder of Firebrand Partners, an operational ac-tivist firm that has invested more than $1 billion in U.S. consumer and media companies. In 1997, he founded Red Envelope, an Internet-based consumer gift retailer (2007 revenue, $100 million). In 1992, Scott founded Prophet, a brand strategy consultancy that employs more than 250 professionals in the United States, Europe, and Asia. Scott was elected to the World Economic Forum’s “Global Leaders of Tomorrow,” which recognizes 100 individuals under age 40 “whose accomplishments have had impact on a global level.”
Scott has served on the boards of directors of Eddie Bauer, The New York Times Company, Gateway Computer, and UC Berke-ley’s Haas School of Business.
VeROniqUe VALCUL2
Veronique began her career in Deloitte Consulting’s Strategy & Operations practice where she worked with some of the word’s largest retail, manufacturing, and pharma corporations. While there, she conducted extensive social media analyses of consumer-facing brands and contributed to the firm’s growing interest in the space. Post Deloitte, she moved to the Winterberry Group where she performed strategic consulting for advertising and marketing services companies. Veronique received her B.A. in Communications from the University of Pennsylvania.
MAUReen MULLenL2
Maureen leads L2’s Research and Advisory Practice where she helped developed the Digital IQ Index®. She has benchmarked digital marketing, e-commerce, and social media efforts of more than 300 brands across Pharma, Auto, Luxury, Specialty Retail, Beauty, and the Public Sector. Maureen also has led digital strat-egy consulting engagements for a variety of Fortune 1000 clients. Before joining L2, Maureen was with Triage Consulting Group and led managed care payment review and payment benchmarking projects for hospitals, including UCLA Medical Center, UCSF, and HCA. Maureen has a B.A. in Human Biology from Stanford University and an M.B.A. from NYU Stern.
FReD bROwnBrand Translation Expert, Last Exit
Fred is managing director of Last Exit’s London office where he leads web, social media, mobile, SEO, and eDM projects for clients including Belvedere, MediaCom, F&F, and numerous medical, aerospace and logistics brands. He began his career as an industrial designer, working on projects including the Airbus A380, Panasonic cell phones, and Polaroid cameras. In 1999, aged 28, Fred launched award-winning new media agency Deepend’s first North American office in New York with fellow Last Exit partner Nuri Djavit; together leading digital projects for clients including FIT, Kenneth Cole, and Salomon Smith Barney. He has a First Class Honours Degree from London South Bank University and has served on the board of British Design Innovation.
R. DAnieLLe bAiLeyL2
Danielle began her career at The Home Depot, Inc., where she led a variety of internal consulting engagements focused on sup-ply chain, merchandising, and in-store process improvement. She went on to manage the implementation of award-winning mobile initiatives for several large media clients, including The New York Times Company, NBC Universal, Disney/ABC, Maxim magazine, and Zagat. Danielle has a B.S. in Systems Engineering from the University of Virginia and an M.B.A. from NYU Stern.
ChRiSTine pATTOnCreative Director, L2
Christine is a brand and marketing consultant with more than 15 years of experience creating brand identities and marketing communications for aspirational and luxury brands. As creative director of L2, she leads the translation of the L2 brand across all touchpoints, with a particular focus on the visual packag-ing of L2’s research.She began her career at Cosí, where she developed the brand and oversaw its evolution from concept through growth to 100 restaurants. Since then she has provided creative direction for a wide array of clients, including the launch of Kidville and CosmoGIRL! magazine. Christine received a B.A. in Economics and Journalism from the University of Connecticut and an M.B.A from NYU Stern.
JOn weinbeRGL2
Jon began his career as a strategist and copywriter at The Moderns, a boutique Manhattan-based branding consultancy, where he worked with clients ranging from start-ups to Fortune 1000 corporations. While there, he managed digital strategy for both the firm and its clients. Jon received an A.B. in Government
with a secondary in Near Eastern Language and Civilizations from Harvard University, where he served as an associate editor for the Harvard International Review.
kATheRine TAiTL2
Katherine is a Summer Research Analyst at L2 who contributed to the data collection, analysis and writing for this study. Before join-ing L2, Katherine worked at the Boston Consulting Group and also has professional experience as a teacher and editor. She has an M.A. in Economics from The New School for Social Research and a B.A. in Sociology and Anthropology from Carleton College.
JeSSiCA bRAGAL2
Jessica, a freelance art director, specializes in identity, iconog-raphy, event graphics, and invitations. She began her career in fashion, designing textiles and prints at Elie Tahari’s design studio in New York City. She then focused on the Elie Tahari brand aesthetic and consistency in design across its many developing disciplines. She went on to become the art director of a small, prestigious design firm in Chelsea, where she focused on event graphics, digital and print collateral, and brand aesthetics for companies both large and small. Jessica has a B.F.A. in Graphic Design and an A.A.S. in Illustration from Rochester Institute of Technology.
MiChAeL LAZeROwCEO, Buddy Media
Michael is a serial entrepreneur who has co-founded four suc-cessful internet-based media companies. He has a passion for creating, managing and growing companies from the ground up. Michael’s first foray into entrepreneurship came with the founding of University Wire, an Associated Press-like network of more than 700 student-run newspapers that is now owned by CBS Corp. Building on his growing experience in the online space, Michael next founded GOLF.com, which was purchased by Time Warner’s Time Inc. division in January 2006.
Michael is currently the chairman and CEO of Buddy Media, Inc., a New York-based company whose Facebook management system is used by global brands and agencies. Michael graduated from Northwestern University in Evanston, Ill. with a B.S. and M.S. in Journalism in 1996. He is a regular contributor to Advertising Age, MediaPost, Fortune, and iMedia Connection, among other publica-tions, and frequently is called upon to speak at industry events including the Monaco Media Forum, the Consumer Electronics Show, OMMA Global, Web 2.0 Expo, and iMedia Brand Summit.
T e A M : L 2
L2 is a think tank for digital innovation.
We are a membership organization that brings together thought leadership from academia and industry to drive digital marketing innovation.
ReSeARCH
Digital iq index®: The definitive benchmark for online competence, Digital IQ Index® reports score
brands against peers on more than 350 quantitative and qualitative data points, diagnosing their
digital strengths and weaknesses.
eVenTS
Forums: Big-picture thinking and game-changing innovations meet education and entertainment.
The largest gatherings of prestige executives in North America.
300+ attendees
Clinics: Executive education in a classroom setting with a balance of theory, tactics, and
case studies.
60 –120 attendees
working Lunches: Members-only lunches led by digital thought leaders and academics.
Topic immersion in a relaxed environment that encourages open discussion.
12–24 attendees
MbA Mashups: Access and introduction to digital marketing talent from top MBA schools.
COnSuLTinG
Advisory Services: L2 works with brands to garner greater return on investment in digital initiatives.
Advisory work includes Digital Roadmaps, Social Media Strategy, and Site Optimization engagements.
MeMBeRSHiP
For membership info and inquiries: membership@L2ThinkTank.com
uPCOMinG 2011 eVenTS
09.09.11 L2 Clinic China NYC
A full-day clinic devoted to raising brands’ Digital IQs in the
world’s biggest—and soon-to-be most digitally savvy—
consumer market.
11.10.11 L2 Forum Innovation 2011 NYC
Called the “TED for marketing,” L2’s third-annual Innovation
Forum will bring together the highest density of scholars,
business leaders, startups, and marketing executives in
North America.
11.21.11 L2 Clinic The Social Graph PARIS
Academics and industry professionals highlight the
opportunities, challenges, and underpinnings of social media
in the prestige industry in a one-day, intensive Clinic.
uPCOMinG 2011 ReSeARCH
pReSTiGe 100® Reports:
China
DiGiTAL iq inDex® Reports:
Beauty
Fashion & Leather Goods
Watches & Jewelry
Gen y AFFLUenTS Reports:
Prestige Brand Ranking
A Think TAnk for DiGiTAL innOVATiOn
51 East 12th Street, 2nd Floor
New York, NY 10003
w: L2ThinkTank.com
e: info@L2ThinkTank.com
© L2 2011 L2ThinkTank.com